AN ACT Relating to medical injury recovery; reenacting and amending RCW 5.60.060; adding a new chapter to Title 7 RCW; creating new sections; and providing an expiration date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. PREAMBLE. The legislature finds that a large portion of the judgments awarded to persons injured due to the substandard delivery of health care services does not go to the patient. The legislature further finds that awards for pain and suffering, loss of consortium, and other noneconomic portions of plaintiffs' recovery often fund the judicial system which adjudicates their claims rather than accrue to plaintiffs. The legislature also finds that plaintiffs who do eventually recover often must wait many months or years for their compensation due to delays within the state's trial courts. Finally, the legislature finds that the costs of the judicial process are reflected in recoveries and artificially drive up professional liability insurance premiums which health care consumers ultimately pay.

Therefore, the legislature concludes that a system is desirable which encourages the expedited payment of economic and related losses to a person who has suffered injury or loss because of substandard health care services. Such a system should reduce the costs of adjudication.

The legislature further concludes that in order to induce and justify participation of the parties, the new system must be structured to provide benefits to both the persons claiming such injuries and health care providers accused of causing such injuries.

The legislature lastly concludes that the crisis in health care malpractice calls for bold initiatives which may not be perfect but will result in a net improvement in the system through the amelioration of the problems noted above.

NEW SECTION. Sec. 2. DEFINITIONS. As used in this chapter, the following terms shall have the designated meanings except where the context clearly indicates otherwise:

(1) "Claimant" means any injured person claiming to have suffered a loss or injury induced by health care or any person asserting any derivative claim such as loss of consortium, loss of society and companionship, or destruction of the parent-child relationship. The term includes any successor in interest, guardian of such person, or other representative having standing to assert such a claim. The term includes the plural where appropriate.

(2) "Claim expenses" means reasonable attorneys' fees based on actual hours expended and normal billing rates, reasonable costs of preparing a claim for submission under this chapter, and other reasonable and necessary expenses incurred by a party pursuant to participation in the system created by this chapter.

(3) "Clerk" means the clerk of the superior court in which the MIRA claim is filed, which court must be one in which venue would be proper for a civil action based on the facts alleged in the MIRA claim.

(4) "Collateral benefits" means all benefits paid and substantially certain to be paid to the claimant or on the claimant's behalf, under, from, or pursuant to:

(a) The United States Social Security Act or any state or federal income replacement, disability, workers' compensation, or other act designed to provide partial or full wage or income replacement;

(b) Any accident, health or sickness, income or wage replacement insurance, income disability insurance, casualty or property insurance (including automobile accident and homeowners' insurance benefits), or any other insurance benefits, except life insurance benefits;

(c) Any contract or agreement of any group, organization, partnership, or corporation to provide, pay for, or reimburse the cost of medical, hospital, dental, or other health care services or provide similar services; or

(d) Any contractual or voluntary wage continuation plan, or payments made pursuant to such a plan, provided by an employer or otherwise, or any other system intended to provide wages during a period of disability.

(5) "Compensation benefits" means the sum of economic damages and noneconomic damages plus claim expenses.

(6) "Noneconomic damages" shall have the same meaning and limitation as in RCW 4.56.250.

(7) "Economic damages" shall have the same meaning as in RCW 4.56.250.

(8) "Fault" shall have the same meaning as in RCW 4.22.015.

(9) "Health care provider" means any person, partnership, corporation, or other entity which provides health care whether or not regulated by the state, but does not include family members of the injured person providing health care for no charge. The term includes the plural where appropriate.

(10) "Injured person" means a natural person who is alleged to have suffered a loss or injury induced by health care.

(11) "Loss or injury induced by health care" means physical or mental sickness or disease or bodily injury, including death, proximately caused by the fault of or the intentional infliction of harm by a health care provider in the course of providing health care.

(12) "MIRA claim" means a document containing the following information:

(a) The name and address of the claimant and the name and address of the injured person if that person is different than the claimant;

(b) The name and address of the attorney for or other representative of the claimant;

(c) A short and plain statement of the facts and legal theories which are alleged to entitle claimant to the damages sought. Included in that statement shall be the date or dates of the health care alleged to have caused the injury or loss and the name or, if the name is not known, a description by job category or otherwise of each person believed to have provided the health care alleged to have caused the injury or loss;

(d) A short and plain statement of the nature and extent of any loss or injury induced by the provision of health care;

(e) A table stating separately the amounts of past and future economic and noneconomic damages claimed. The table shall set forth in as much detail as possible the nature and amount of each element or item of damage claimed, including health care expenses, loss of earnings, and cost of obtaining substitute domestic services. The statement shall also specify what percentage of the claimed damages are alleged to be the responsibility of each health care provider identified in the MIRA claim;

(f) The name and address of all persons the claimant believes have knowledge of the facts described in the MIRA claim;

(g) Whether the claimant waives the physician-patient privilege as of the time of filing the MIRA claim and, if so, the names and addresses of all health care providers who have examined or treated the claimant; and

(h) A claim expense statement in substantially the same form as that established by section 17 of this act listing claim expenses incurred to date.

The MIRA claim shall be verified by the claimant and signed by the claimant's attorney or other representative, if any. The signature of the claimant or claimant's representative constitutes a certificate that to the best of the signatory's knowledge, information, and belief, formed after reading the MIRA claim and after a reasonable inquiry, the claim is well-grounded in fact and is warranted by existing law or by a good faith argument for the extension, modification, or reversal of existing law.

(13) "Panel" means the three-person group performing functions pursuant to this chapter. The panel shall consist of one active or retired judge appointed by the presiding judge and one attorney and one physician selected pursuant to this chapter.

(14) "Panel expenses" means those expenses reasonably incurred by the panel including lodging, compensation to the panel, clerical assistance, compensation to persons appointed under section 12(5) of this act, and costs to obtain meeting space necessary for the efficient and effective work of the panel.

NEW SECTION. Sec. 3. CLAIMS INVOLVING LESS THAN FIFTY THOUSAND DOLLARS. A claimant whose claim alleges less than fifty thousand dollars in compensation benefits shall file a MIRA claim with the clerk and shall complete the proceedings established in this chapter prior to commencing an action based on that claim in any court located in this state. The claimant shall serve a copy of the MIRA claim on the health care provider named. Service shall be pursuant to the rules governing service of process.

NEW SECTION. Sec. 4. PROCEEDINGS AFTER SERVICE. Upon receipt of proof of service of the MIRA claim alleging less than fifty thousand dollars in compensation benefits, the clerk shall notify the presiding judge of the court who shall then appoint an active or retired judge to be the chair of the panel. The chair of the panel shall have those powers and duties described in section 11 of this act, but need not begin the process to name the other members of the panel immediately.

NEW SECTION. Sec. 5. RESPONSE TO MIRA CLAIM. The health care provider shall serve a written response on the claimant within sixty days of service on it of a MIRA claim alleging less than fifty thousand dollars in compensation benefits. If the health care provider fails or refuses to serve a timely response, the claimant may immediately file a request with the clerk for a panel hearing. If, within ten days following the health care provider's failure to serve a timely written response on the claimant, the claimant has not filed a request with the clerk for a panel hearing, then MIRA proceedings are deemed complete. Once a request for a panel hearing is filed with the clerk, the MIRA claim shall be dealt with pursuant to sections 9 through 33 of this act and RCW 5.60.060.

NEW SECTION. Sec. 6. RESPONSE TO TENDER. If the health care provider tenders the full amount of compensation benefits claimed against it in the MIRA claim, the claimant shall be deemed to have accepted the tender. If the health care provider tenders less than the full amount of damages claimed against it in the MIRA claim, the claimant shall respond within fifteen days to that tender before the tender is deemed withdrawn. Acceptance of a tender by the claimant or of a counter-demand by a health care provider shall constitute a settlement agreement for purposes of chapter 4.22 RCW. The parties shall promptly inform the clerk of any settlement.

NEW SECTION. Sec. 7. REQUEST FOR PANEL HEARING. If no settlement agreement is reached within thirty days after service of the health care provider's response under section 5 of this act, the health care provider or the claimant may then file with the clerk and serve on all parties to the MIRA proceeding a request for a panel hearing. The MIRA claim shall then be dealt with pursuant to sections 9 through 33 of this act. If no request is filed with the clerk within forty days after service of the health care provider's response, the MIRA proceedings are deemed complete.

NEW SECTION. Sec. 8. MIRA CLAIM INVOLVING FIFTY THOUSAND DOLLARS OR MORE. (1) A claimant whose claim alleges fifty thousand dollars or more in compensation benefits shall file a MIRA claim with the clerk and shall complete the proceedings established in this chapter prior to commencing an action based on that claim in any court located in this state. The claimant shall serve a copy of the MIRA claim on the health care provider named. Service shall be pursuant to the rules governing service of process.

(2) At any time within sixty days of receipt of service under this section of a MIRA claim on it, a health care provider may make a written offer of the full amount of compensation benefits stated in the MIRA claim. The claimant shall be deemed to have accepted such offer, thereby creating a settlement agreement for purposes of chapter 4.22 RCW. The parties shall promptly inform the clerk of the settlement.

(3) The health care provider shall serve a written response on the claimant within sixty days of service on it of a MIRA claim alleging fifty thousand dollars or more in compensation benefits. The written response shall answer the factual allegations in the MIRA claim and set forth in a short and plain statement the factual and legal basis of the health care provider's position with regard to the MIRA claim.

NEW SECTION. Sec. 9. JOINDER OF ADDITIONAL PARTIES. Within thirty days after service on it of a MIRA claim alleging fifty thousand dollars or more in compensation benefits or within thirty days after the filing of a request for a hearing, a health care provider may join other health care providers or persons believed to have claims deriving from the injured person's loss or injury induced by health care as participants to the MIRA proceedings. Joinder shall be effected by service of the MIRA claim on the party to be joined. When a health care provider is served with a copy of the MIRA form under this section, a short and plain statement of the facts and legal theories which are alleged to entitle the health care provider joining the other health care provider or the claimant to relief against the health care provider being joined shall be included. When a MIRA claim is served on a person believed to have a claim deriving from that of the injured person, a short and plain statement describing the potential claim shall accompany the MIRA claim.

NEW SECTION. Sec. 10. SELECTION OF PANEL. Upon receipt of proof of service of a MIRA claim alleging fifty thousand dollars or more in compensation benefits, the clerk shall notify the presiding judge of the court who shall then appoint an active or retired judge to be the chair of the panel. The clerk shall inform the parties of the appointment. The other panel members shall be selected according to the following procedures.

(1) The presiding judge of each superior court shall prepare two master lists of persons willing to serve as panel members. One list shall be composed of medical doctors licensed to practice medicine in this state. In making the list, the presiding judge may accept the recommendations of recognized professional medical societies. The list shall, if possible, be divided into sublists of medical doctors according to specialty. The other list shall be composed of qualified attorneys licensed to practice in this state. In making this list, the presiding judge may accept the recommendations of recognized professional legal societies.

(2) Within sixty days after the filing of the MIRA claim, the clerk shall send to the claimant and to all health care providers who have been served, a list of attorneys and medical doctors from which the panel members will be selected. The clerk shall select at random from the master lists the names of five physicians and five attorneys to comprise that list. The list shall be sent to the persons on the list, who shall have ten days within which to disqualify themselves.

(3) One attorney and one physician shall serve as panel members. If the parties are unable to agree on which attorney or physician or both shall serve on the panel, they shall so inform the clerk. If the parties are not able to agree within fifteen days after service of the list, the claimant shall strike the names of two attorneys and of two physicians from the list and send that list to the clerk. The health care providers shall, as a whole, strike the names of two attorneys and of two physicians from the list and send that list to the clerk. If only one attorney or one physician remains on the list, that attorney or physician shall be a panel member. If more than one attorney or physician remains on the list, the clerk shall select by random method one of the remaining attorneys and physicians to be panel members.

(4) If there are disqualifications or successful challenges for cause, the clerk shall select at random additional persons from the master lists as needed.

(5) For a person other than an active judge to qualify to act as a voting member of the panel, that person must sign and file an oath of office, either to serve in a particular case, or as a member of a master list of persons willing to serve as panel members.

NEW SECTION. Sec. 11. DUTIES AND POWERS OF PANEL CHAIR. The panel chair shall have the following duties and powers:

(1) To hear and decide all challenges for cause regarding another person's membership on the panel or a request that the chair disqualify himself or herself;

(2) To exercise rigorous control over discovery and to hear and decide all discovery disputes to the end that the proceeding shall be heard with a minimum of expense and delay;

(3) To issue subpoenas and administer oaths;

(4) To establish, with the advice and consent of the panel members, the time, date, and place of the panel hearing, which date shall be within six months of the filing of the MIRA claim, and to grant a continuance of the hearing date of up to three months for good cause shown. The chair shall cause all parties to be notified of the hearing date at least sixty days before the hearing; and

(5) To preside at the panel hearing.

NEW SECTION. Sec. 12. DUTIES AND POWERS OF PANEL. The chair and other members of the panel shall have the following duties and powers:

(1) To diligently and impartially dispose of the business of the panel;

(2) To take testimony and question witnesses at the panel hearing;

(3) To hear argument regarding all issues raised by the MIRA claim and the defenses thereto;

(4) To apply the law of this state to the evidence presented at the panel hearing as though it were a civil action, with the exceptions provided in this chapter;

(5) To appoint on notice to the parties an impartial expert or experts in the underlying clinical subject matter to advise the panel and participate on such terms as the panel agrees in the hearing and deliberations as a nonvoting member of the panel; and

(6) To issue on majority vote written findings regarding the issues raised by the MIRA claim and any defenses thereto. The findings shall be served on the parties within thirty days after the conclusion of the panel hearing and shall make specific findings regarding at least the following issues:

(a) Whether the fault of the claimant caused or contributed to the loss or injury alleged;

(b) Whether the fault of any health care provider participating in the MIRA proceeding caused or contributed to the loss or injury alleged;

(c) The percentage of the total fault which caused or contributed to the claimant's alleged loss or injury which is attributable to each health care provider participating in the MIRA proceedings and to the claimant;

(d) The amount of compensation benefits due to the claimant from the health care providers participating in the MIRA proceedings, which finding shall set forth the elements of the compensation benefits calculation, including the amount and source of any collateral benefits which resulted in a reduction of benefits. Claim expenses shall only be included if economic or noneconomic damages are found; and

(e) If economic damages are found to be due to the claimant which if awarded in a civil action would be subject to periodic payment, then the panel shall also recommend an appropriate periodic payment schedule.

NEW SECTION. Sec. 13. DISCOVERY ALLOWED. All parties shall be allowed to use any discovery procedure provided by the Washington superior court civil rules as though the MIRA proceeding was a civil action, subject to such limitations as the panel chair may order to promote an economical and speedy resolution of the claim. In a subsequent civil action by a claimant or health care provider, the discovery obtained during the MIRA proceedings shall be treated as though it were obtained as part of the civil action.

NEW SECTION. Sec. 14. PREHEARING STATEMENT. At least twenty-one days prior to the panel hearing, each party shall serve on the other and on each member of the panel a statement containing the following:

(1) A list of the names and addresses of each witness whom the party expects to call along with a brief summary of each witness's testimony;

(2) The affidavit or deposition testimony of each expert witness whom the party expects to call;

(3) A list of all documentary evidence which the party expects to offer.

(4) A short and plain statement of the factual and legal basis for the party's position.

With the exception of one medical expert witness who may testify in person at the panel hearing, all other expert testimony offered by a party shall be in affidavit or deposition form.

Copies of the documents under subsection (3) of this section shall be furnished to the panel members with the prehearing statement. Each party, upon request, shall make the documentary evidence available for inspection and copying by other parties.

No party failing to comply with the requirements of this section may present the testimony or documentary evidence required to be disclosed without permission of the panel for good cause shown.

NEW SECTION. Sec. 15. REPLY STATEMENT. At least seven days prior to the panel hearing, any party wishing to reply to another party's prehearing statement shall serve on all parties and the panel members a statement containing:

(1) The affidavit or deposition testimony of any expert testimony offered in rebuttal, except for expert medical testimony to be offered through the medical witness who will testify in person;

(2) A list of all objections to the introduction of testimony or evidence offered by another party in its prehearing statement; and

(3) A short and plain statement in reply to the factual and legal argument presented in another party's prehearing statement.

NEW SECTION. Sec. 16. HEARING PROCEDURES. (1) The chair shall exercise control over the method and order of presenting testimony and argument;

(2) The chair shall place a witness under oath or affirmation, a violation of which oath or affirmation shall be deemed a contempt of court in addition to any other penalty provided by law;

(3) The hearing shall be recorded electronically by the panel;

(4) The rules of evidence shall be liberally applied and construed, except those rules regarding the qualification of experts which shall be applied the same as in a civil action; and

(5) The following documents, if relevant, are presumed to be admissible provided the person offering them has complied with the requirements of section 14 or 15 of this act. This rule of evidence does not restrict argument or proof relating to the weight to be afforded the document nor does it restrict the panel's authority to give the document such weight as the panel determines. The documents presumed admissible under this rule are:

(a) A bill, report, chart, or record of a health care provider on a letterhead or billhead;

(b) The affidavit or deposition testimony of any witness;

(c) A photograph, x-ray, drawing, or similar documentary evidence to the extent it is admissible under the rules of evidence, but without the need for formal proof of authentication or identification; and

(d) A document not specifically covered by (a) through (c) of this subsection but having equivalent circumstantial guarantees of trustworthiness.

NEW SECTION. Sec. 17. CLAIM EXPENSE STATEMENT. (1) Within seven days after the conclusion of the panel hearing, the claimant shall serve on the panel members and on all parties, a verified statement listing all claim expenses that the claimant requests be included in the award of compensation benefits. A short and plain statement supporting the reasonableness and necessity of the costs and expenses shall be included. The request for attorneys' fees shall be supported by an affidavit showing the number of hours actually expended by each attorney on particular tasks and each attorney's normal billing rate for that type of service. An additional affidavit addressing the factors set forth in the Washington rules of professional conduct to be considered in setting reasonable attorneys' fees may also be submitted.

(2) An attorney shall not contract for or collect a fee for representing any person in a MIRA proceeding or subsequent civil action in excess of the amount recommended by the panel in its findings or awarded by the court pursuant to section 21 of this act.

(3) Within seven days of receipt of the claim expenses statement, any party may serve on the panel members and on all other parties affidavits and written argument contesting the award of any amounts in the claim expense statement.

NEW SECTION. Sec. 18. PROCEEDINGS AFTER FINDINGS ISSUED. Each health care provider participating in the panel hearing shall serve a response on the claimant within fifteen days following service of the panel's findings. A health care provider may make a joint response with another health care provider. That response shall indicate the amount of compensation benefits, if any, that the health care provider is willing to pay to the claimant to settle the claim. The claimant shall have fifteen days to reply to the health care provider before the health care provider's offer of settlement, if any is deemed withdrawn. The proceedings under this chapter are deemed completed thirty days after the panel serves its findings.

NEW SECTION. Sec. 19. ADMISSIBILITY OF PANEL FINDINGS. In a subsequent civil action, the findings of the panel are admissible in evidence but only against a party that participated in the MIRA proceedings. The jury shall be instructed that the findings of the panel are not binding but may be afforded such weight as the jury chooses to ascribe to them. No member of the panel may participate as a witness, advocate, or judge in a subsequent civil action relating to the MIRA claim.

NEW SECTION. Sec. 20. PANEL NOT LIABLE FOR OFFICIAL ACTION. No member of the panel is liable in damages for libel, slander, or defamation of character of any party to the MIRA proceedings for any action taken or recommendation made by such person acting within his or her official capacity.

NEW SECTION. Sec. 21. LIABILITY FOR ATTORNEYS' FEES AND COSTS. (1) If, pursuant to section 18 of this act, a health care provider tenders less than the full amount of compensation benefits recommended by the panel in its written findings, then that health care provider is liable to the claimant in a subsequent civil action in which the claimant prevails for the claimant's reasonable attorneys' fees and costs for the MIRA proceedings and for the civil action.

(2) If, pursuant to section 18 of this act a health care provider tenders the full amount of or more compensation benefits than recommended by the panel in its written findings, then that health care provider is liable to the claimant in a subsequent civil action in which the claimant prevails only for costs pursuant to chapter 4.84 RCW.

(3) If, pursuant to section 18 of this act, a claimant rejects a tender of the full amount of or more compensation benefits than recommended by the panel in its written findings, then in a subsequent civil action that claimant is liable to that health care provider for that health care provider's reasonable attorneys' fees and costs for the MIRA proceedings and for the civil action, but only if the claimant does not receive a greater award of economic and noneconomic damages at trial than was recommended by the panel in its written findings.

(4) In any subsequent civil action where the claimant prevails, the claimant's attorney is entitled to be paid the full amount of the reasonable attorneys' fees and costs advanced in the MIRA proceedings and subsequent civil action.

(5) The amount of attorneys' fees and costs to be awarded or paid under this section shall be determined by the court after a hearing.

NEW SECTION. Sec. 22. REPRESENTATION OF PARTICIPANTS. The participants in the MIRA proceeding established by this chapter may be represented by attorneys at all stages.

NEW SECTION. Sec. 23. SANCTIONS FOR REFUSAL TO PARTICIPATE. Any health care provider or person who is properly joined or served under the procedures established by this chapter and who fails or refuses to participate in these proceedings shall have its defenses or claims stricken in any subsequent civil action.

NEW SECTION. Sec. 24. TERMS OF PAYMENT. The health care provider shall make payment within thirty days of a settlement made pursuant to this chapter. If payment is not so made, the claimant is entitled to collect interest on the amount of the settlement at the rate permitted under RCW 19.52.020 from the date of acceptance through payment and reasonable costs, including attorneys' fees for the collection of the settlement payment or interest thereon or both.

NEW SECTION. Sec. 25. CONFIDENTIAL OFFERS OF COMPROMISE. In any subsequent civil action, the MIRA claim and any tender, response, or reply under this chapter shall be considered offers of compromise.

NEW SECTION. Sec. 26. EVIDENCE OF COLLATERAL BENEFITS. At the panel hearing and in a subsequent civil action, proof of payment of collateral benefits and payment by the claimant to obtain those collateral benefits shall be admissible in evidence. Such evidence shall be considered by the panel in preparing its findings and by the jury in reaching its verdict.

NEW SECTION. Sec. 27. FRIVOLOUS ACTION. In a civil action arising from a claim subject to this chapter, if the court makes specific findings that the position of the claimant is frivolous and without reasonable basis, then the court shall award reasonable costs, including attorneys' fees, for both the MIRA proceeding and the civil action to a defendant health care provider.

NEW SECTION. Sec. 28. FUTURE CHANGES. (1) Any settlement agreement reached pursuant to proceedings established by this chapter may be modified as to amounts to be paid in the future upon finding that a material and substantial change in the circumstances, including the prognosis, of the injured individual not attributable to the fault of the health care providers that participated in the MIRA claim proceedings or the injured person occurred within twenty-four months after the settlement agreement was entered into, or that there is newly discovered evidence concerning the injured person's physical condition, prognosis, losses, or rehabilitation prior to entering into the settlement agreement which could not have been known previously or discovered in the exercise of reasonable diligence prior to such agreement.

(2) A civil action for modification of the settlement agreement can be filed with the superior court in the county in which the original matter was filed or in a county in which all the involved parties reside. The matter shall be treated as a civil action without a right to a jury trial.

(3) The only matters which shall be considered are the new circumstances, and the court shall be bound by the allocation of fault findings of the panel. No judgment may be found to be inadequate on the basis of changes in inflation or cost-of-living increases.

(4) Only the claimant may initiate proceedings under this section.

(5) If additional compensation is ordered for the claimant and there is no solvent entity available to make such payments, to the extent consistent with the responsible fiscal management, the compensation fund created by section 32 of this act may be used to make such payments.

NEW SECTION. Sec. 29. EFFECT OF PROCEEDINGS ON STATUTE OF LIMITATIONS. The statute of limitations for any action for claims based on losses or injuries induced by health care which are subject to proceedings under this chapter shall be tolled as of the date of filing the MIRA claim and shall continue to be tolled until thirty days after the panel issues its findings.

NEW SECTION. Sec. 30. SUBROGATION RIGHTS. Any entity which has provided an injured person with collateral benefits shall be subrogated to that person's rights against a health care provider in the event the injured person receives compensation benefits, but only to the extent that the collateral benefits actually reduced the amount of compensation benefits or damages. The finding of the panel relating to the collateral benefits and liability of the health care provider shall be admissible in a subsequent action at the option of such entity.

NEW SECTION. Sec. 31. ASSIGNMENT OR ATTACHMENT OF JUDGMENT PROCEEDS. (1) All amounts received for health care and related medical expenses are exempt from garnishment, attachment, execution, or any other process or claim, except upon a claim of a creditor who has provided health care.

(2) Compensation benefits other than those for health care and related expenses are exempt from garnishment, attachment, execution, or any other process or claim to the extent that wages or earnings are exempt under any applicable law exempting wages or earnings from garnishment, attachment, execution, or any other process or claim.

(3) An assignment or an agreement to assign any right to compensation benefits for economic damages accruing in the future is unenforceable except as to benefits for work loss to secure payment of maintenance or child support or as to health care and related expenses to be provided in the future.

NEW SECTION. Sec. 32. MEDICAL INJURY COMPENSATION FUND. (1) There is hereby created a special fund to be known as the medical injury compensation fund to be administered by the insurance commissioner and to be in the custody of the state treasurer. The fund shall only be used to pay those costs or expenses enumerated in subsections (3) and (5) of this section.

(2) The fund shall be financed by:

(a) A one percent surcharge on all malpractice premiums paid by health care providers in the state of Washington and on all funds reserved by health care providers in the state of Washington for the payment of claims relating to the provision of health care, which shall be imposed and collected by the insurance commissioner;

(b) A surcharge of five percent on all compensation benefits paid pursuant to this chapter which shall be added to the amount of the compensation benefits and paid by the health care provider or the provider's insurance carrier as if it were a loss;

(c) A surcharge of five percent on all judgments and settlements of malpractice lawsuits paid by health care providers in the state of Washington which shall be paid by the health care provider or the provider's insurance carrier as if it were a loss; and

(d) Appropriations by the state legislature.

(3) The insurance commissioner may employ such personnel as are necessary to assist in the administration of the fund and charge their salaries and other necessary expenses against the fund, but the total of such charges shall not exceed fifteen percent of the opening balance of the fund in any fiscal year.

(4) The insurance commissioner may adopt rules relating to the administration of the fund including setting reasonable limits on panel fees and expenses.

(5) To the extent any compensation benefits owed to a claimant pursuant to a settlement agreement entered into pursuant to proceedings under this chapter remain uncollected by the claimant after making diligent efforts to obtain them, those benefits can be paid for by the compensation fund to the extent consistent with its responsible fiscal administration. The state of Washington shall be subrogated to the rights of the claimant against the health care provider to the extent of such payments from the fund. The fund shall also be used to pay uncompensated panel expenses. Panel expenses which remain unpaid shall be paid from appropriations to the superior court.

(6) The fund is subject to the allotment procedure provided under chapter 43.88 RCW, but no appropriation is required for disbursements.

NEW SECTION. Sec. 33. SUNSET AND REVIEW. (1) This chapter shall expire on July 1, 1995.

(2) The insurance commissioner shall report to the legislature on January 2 of each year on the effectiveness of this chapter in achieving its stated goals and other matters of importance. The status and operation of the compensation fund shall be included in that report.

Sec. 34. Section 294, page 187, Laws of 1854 as last amended by section 1501, chapter 212, Laws of 1987 and by section 11, chapter 439, Laws of 1987 and RCW 5.60.060 are each reenacted and amended to read as follows:

(1) A husband shall not be examined for or against his wife, without the consent of the wife, nor a wife for or against her husband without the consent of the husband; nor can either during marriage or afterward, be without the consent of the other, examined as to any communication made by one to the other during marriage. But this exception shall not apply to a civil action or proceeding by one against the other, nor to a criminal action or proceeding for a crime committed by one against the other, nor to a criminal action or proceeding against a spouse if the marriage occurred subsequent to the filing of formal charges against the defendant, nor to a criminal action or proceeding for a crime committed by said husband or wife against any child of whom said husband or wife is the parent or guardian, nor to a proceeding under chapter 71.05 RCW: PROVIDED, That the spouse of a person sought to be detained under chapter 71.05 RCW may not be compelled to testify and shall be so informed by the court prior to being called as a witness.

(2) An attorney or counselor shall not, without the consent of his or her client, be examined as to any communication made by the client to him or her, or his or her advice given thereon in the course of professional employment.

(3) A member of the clergy or a priest shall not, without the consent of a person making the confession, be examined as to any confession made to him or her in his or her professional character, in the course of discipline enjoined by the church to which he or she belongs.

(4) Subject to the limitations under RCW 71.05.250, a physician or surgeon or osteopathic physician or surgeon shall not, without the consent of his or her patient, be examined in a civil action as to any information acquired in attending such patient, which was necessary to enable him or her to prescribe or act for the patient, except as follows:

(a) In any judicial proceedings regarding a child's injury, neglect, or sexual abuse or the cause thereof; and

(b) Ninety days after filing a MIRA claim, as defined in section 2 of this 1989 act, or an action for personal injuries or wrongful death, the claimant shall be deemed to waive the physician-patient privilege. Waiver of the physician-patient privilege for any one physician or condition constitutes a waiver of the privilege as to all physicians or conditions, subject to such limitations as a court may impose pursuant to court rules.

(5) A public officer shall not be examined as a witness as to communications made to him or her in official confidence, when the public interest would suffer by the disclosure.

NEW SECTION. Sec. 35. SHORT TITLE. This act may be cited as the medical injury recovery act (MIRA).

NEW SECTION. Sec. 36. CAPTIONS. As used in this act, captions constitute no part of the law.

NEW SECTION. Sec. 37. SEVERABILITY. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 38. LEGISLATIVE DIRECTIVE. Sections 1 through 33 of this act shall constitute a new chapter in Title 7 RCW.

NEW SECTION. Sec. 39. APPLICABILITY. This act applies to all actions filed on or after August 1, 1989.